While historically confined to medical and academic research, challenge funds – competitive financing for innovative solutions to entrenched problems – have gained traction in the international development field over the last decade.

Pioneered by the UK Department of International Development (DFID), challenge funds have championed transformational disruptive technologies, such as M-Pesa, Kenya’s mobile money transfer service. The electronic payment system, which allows users to withdraw, deposit and transfer cash through their mobile phones, started as a pilot project funded by DFID’s Financial Deepening Challenge Fund. Today, more than two thirds of Kenyans use the channel, and the innovation has changed the scope of financial inclusion programs globally.

If you have children or grandchildren, you probably have wondered what the world will be like for them in 20 or 30 years. Will it be a better place? Will climate change upend their lives? It's something I have thought about a lot since I became president of the World Bank Group in July 2012. Within the first few months in the job, I was briefed on an upcoming climate change report, and the findings shocked me. I knew then that tackling climate change would be one of my top priorities as leader of a development institution whose mission is ending extreme poverty by 2030 and boosting shared prosperity. If we don't start controlling climate change, the mission to end poverty will fail. Last week I delivered a lecture on climate change at Georgetown University in Washington, D.C., to a roomful of young people who are surely thinking of climate change's impact on their lives. Climate scientists project that if we do nothing to control carbon emissions, temperatures could rise as much as 4 degrees Celsius by the 2080s. Mean temperatures during the last ice age were 4.5 degrees to 7 degrees Celsius lower than today, and the temperature had changed gradually over millennia. We're talking about that kind of temperature shift occurring in the future over a very short period of time. Life on Earth would be fundamentally different.